Answer:
The interest rate is higher in the US.
Explanation:
The forward price is calculated using the following formula,
F= S ( 1+Rd / 1+Rf)^t
where,
- F = Forward rate
- S = Spot rate
- Rd = Nominal interest rate in domestic market
- Rf = Nominal interest rate in foreign market
- t = time in years
We consider that the domestic market is the US and the domestic currency is the USD. Thus, it is a direct quote where 1 EUR = 1.3 USD
The forward price ER is more than the Sport ER only when the interest rate in domestic market is more than the interest rate in foreign market and as a result, the value of domestic currency against a foreign currency in the forward market depreciates.
We can see this by the following example,
Say Spot rate is $1.3 per 1 EUR and the interest rate in US is 10% while that in Euro zone is 5%. When we calculate the forward ER we will see that 1 EUR will buy us more USD in forward (more than 1.3 USD)
F= 1.3 * (1.1 / 1.05)^1 => $1.362 PER 1EUR
<span>salaries payable: (17,800/5)*2= 7,120 (credit)
salaries expenses: 7,120 (debit)</span>
Answer and Explanation:
The journal entries are shown below:
1. The revised estimated amount of total compensation is
= 100,000 shares × $6
= $600,000
2. The action shows that the Farmer Fabrication cumulative effect for the year 2022 earnings
3. The journal entries are shown below:
For the year 2022
Compensation expense
To Paid-in Capital-Stock options $200,000
(Being the compensation expense is recorded) $200,000
For recording this we debited the compensation expense as it increased the expenses and credited the paid in capital as it increased the stockholder equity
The computation is shown below:
= $600,000 ÷ 3 years
= $200,000
Answer:
B. will be horizontal.
Explanation:
In the case when the firm is in the perfect competition market so here the demand curve would be horizontal as because of the same product and also the transaction cost is lesser that means if someone rise the prices so the producer would lost all its revenue
Therefore as per the given situation, the option b is correct
One add that I have seen was a grocery store add. The tequneaches that were used were vibrant colors, big words, and compotion of prices. I was affected by the advertisement because you could see the words clearly, and the prices were good.
Hope I helped!
